The differing customer profiles of individual stores is not limited to the size profiles but requires a skilled knowledge of the stores in order that complete customer needs are optimally serviced.
In the main the responsibility rests with the planner while in some organisations there may be dedicated location planners who will study the key attributes of stores in conjunction with the sales and management staff within the stores. This is often a point that is overlooked as it is easy to be too defensive as to the reasons why certain products have not performed to expectation. An objective separate view from those who interact at the coalface with the customer places the reality of the situation in perspective.
Not all stores will be able to stock everything and the catalogues need to flex to best meet the demand for the customer that is served by the particular store.
What is important to note is that the sum of the location plans from individual store to total company need to be in line with the total merchandise plans which are reconciled to the overall buy.
In terms of the forward cover requirements of stores they are dependent on the rate of turnover that the stores enjoy. In principle the high turnover larger stores will tend to have lower forward covers as they need less stock in relation to the volume of sales to maintain effective levels of display whereas at the other end of the scale the smaller low turnover stores which require more stock in relation to their sales to maintain the availability of all sizes and colours all of the time and thus will be replenished less frequently. The typical relationship would be that the larger stores will require in the region of five weeks forward cover whereas the smaller stores may need ten weeks of forward sales to present full availability to the customers. For this reason and the physical constraints it is likely that the smaller stores will carry a lesser number of styles in the catalogue in comparison to the larger units.
The catalogue of the store will be influenced by the demographics, income bands and cultural factors. The process that the location planner will follow when assessing a store is firstly to review the sales levels of the various categories of product and examine those areas where there have been unacceptable levels of markdown and probe the reasons why this has occurred which may result in a decision to remove certain categories. Conversely missed opportunities need to be identified and action plans drafted to ensure that these are optimised going forward.
It is unlikely that the sales shape across time for every store is going to match that of the overall company. A prime example is a coastal resort store will experience seasonal peak sales during holiday periods while they will be extremely conservative outside these times or conversely stores will experience depressed sales in university towns where there is an exodus of students during the holiday period.
The frequently recommended approach is to plan each store as if it is your only store. This is however easier said than done particularly where some chains may have hundreds of stores. In many cases the control of stocks at micro level can be extremely time consuming and complex but the use of technical software packages have made it possible to accurately measure sales performance and determine stock requirements to the finest detail based on historical sales patterns.
New stores need to be reviewed as the sales shape may be distorted by the initial opening hype or the fact that it may have been only partially open for the period under review. A common approach that is adopted to plan the range selection for new or refurbished stores is to mirror them to a similar profile store and base the quantities on a comparable turnover size store.
Where sales are disappointingly low it might require the de-cataloguing of certain lines or certain sizes of a specific offering in order to minimise markdowns without disappointing a large section of customers and enabling the freeing up of more space to expose good performing ranges more forcefully.
A scenario could exist where stores require a wider assortment of product in lesser quantities. The obvious influencing factors in the main will be space constraints, the changing demographics of the town, the store may have been modernized or a new mall may have opened or closed all of which would justify a wider assortment.
The effective utilisation of space in a store is determined by the percentage sales contribution of each product category. Strategically this may be deviated from, examples of which are where a possible focus is required on a new range launch or because of a younger customer age demographic who have more children will inspire a thrust to aggressively feature children’s ranges. In principle these deviations must be carefully considered so that the other product groupings are not placed in danger of being stifled entirely.
The measurement of space is translated into facings or opportunities for the customers to choose from with relevant appropriate values attached for shelves, rails, pegs, table displays in conjunction with the equipment positioning. In other words, a rail in the darkest back corner of the store will carry less value to that on the entry aisle at the front door of the store which enjoys the greatest traffic flow. The placement of total departments will follow the same principle where the highest turnover departments will enjoy the more prominent positioning with greater exposure.
The layout of the store should facilitate a journey through the store from one area to another interlaced with coordinated displays suggesting to the customer options to consider for a complete wardrobe option including apparel, accessories and impulse products before they reach the pay points. Layouts that are static straight up and down rows fail to entice customers to other areas of the store.